At a time when the global economy is exhausted, it is not surprising that gold prices are trading above $3100 per ounce. A fund manager stated that there is still room for gold to rise as credit quality declines and deficits increase.

Keith Weiner, CEO and founder of Monetary Metals, said, "More and more people are buying gold not because they believe that gold prices will outperform CPI, but because they believe that in a world where credit is abused, you don't necessarily want to be a creditor

At the time of his remarks, spot gold prices were trading above $3100 per ounce after rising about 20% in the first quarter.

In the current environment, Monetary Metals believes that there is a greater demand for gold as an important monetary asset compared to silver.

In its official price forecast released last month, the company stated, "Although we expect silver prices to rise with gold prices (as they have so far), we predict that silver prices will be unwilling to rise and will lag behind gold prices in both magnitude and possible timing

Although Weiner predicts that the US dollar will not soon lose its reserve currency status, he does anticipate that the purchasing power of the US dollar will continue to decline. At the same time, he also pointed out that on the global stage, President Trump's import tariffs have triggered a global trade war, which will prompt more countries to shift from the US dollar to diversification.

He said, "I don't think the US dollar will perform well in the short term, but people are more aware of its limitations. It's like playing a chair snatching game, at some point, the music stops and you don't want to be the last one standing. Maybe I'm 3, 5, or 10 years ahead, but 3 years ahead is always better than 1 hour behind

Weiner stated that the biggest support for gold prices remains the global and US debt growth. Although the US government has implemented significant austerity measures, cutting funding for different projects and laying off personnel, he said it is not enough.

If the government really manages to find $1 trillion in savings, we will only return to the peaceful days after the crisis. Even then, we were writing about how staggering the deficit was. You must find $2 trillion in savings to at least stop digging deeper

Although a savings scale of $1 trillion may be significant, Weiner stated that it may not push the economy into recession, but he added that there are worse things than a recession. He explained that as the unemployment rate rises and the US labor market slows down, defaults increase and the risk of credit events also increases.

He said, "The spiral of debt did not happen yesterday, not during the Biden administration. It has been out of control for decades

In this environment, not only will gold prices perform well, but Weiner also stated that an important niche group is starting to see the value of holding gold. He sees a growing interest from institutional investors and family wealth management offices.

He asked, "If you look at all other asset classes, it's hard to find anything worth believing in. The stock market should have gone down a long time ago, and I don't necessarily want to bet on real estate. So what else would you buy

Meanwhile, despite the significant increase in gold prices over the past 12 months, Weiner stated that he is not too concerned about a sell-off like in 2011, as the dynamics of gold prices have changed. He pointed out that compared to nearly 20 years ago, the leverage ratio of the gold market is much lower and less susceptible to significant selling.